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EDF releases “The State of the Energy Crunch in Texas” report

April 1, 2013

Contact:

Expert contact: Colin Meehan, cmeehan@edf.org, 512.691.3416

Media contact: Erin Geoffroy, egeoffroy@edf.org, 512.691.3407

(Austin, Texas – April 1, 2013) Environmental Defense Fund (EDF)
today released a report titled “The State of
the Energy Crunch in Texas,” highlighting the pressures facing the Texas electric grid, which
include a shrinking water supply, growing population and rising summer
temperatures. The report provides solutions to help keep the lights on in Texas,
which is critical to retain and attract new businesses, and details legislation
that will help meet future energy needs while providing direct benefits to
customers and reducing water usage.

The ongoing drought puts Texas' power plants at risk, threatening
a return of the rolling blackouts caused by extreme winter conditions in 2011.
Fortunately, many of the solutions that are available to keep the lights on
also benefit people and the environment.
Our report focuses on solutions like customer, or demand-side, resources
such as demand response (DR) initiatives (which allow customers to voluntarily reduce
peak electricity use and received a payment for doing so in response to a
signal from their utilities), energy efficiency programs and increasing
renewable energy sources like solar and wind, all of which consume almost no
water and can be built faster than gas and coal plants.

The report also provides an overview of Texas legislation currently
being considered by several committees in the 83rd Legislature. This
includes bills that allow all customer classes to participate in electric
markets, provide innovative clean energy financing mechanisms and offer fair
compensation for customers who provide power back to the electric grid by
generating excess electricity from renewables or conserving energy using demand
response initiatives.

“It’s crucial that we take action now to preserve our electric
grid, said Colin Meehan, policy manager at EDF “This report highlights several
ways to protect customers from rising electric costs while keeping the lights on
and protecting our limited resources.”

The Texas Public Utilities Commission (PUC) actions to date will
lead to higher electric costs for customers, by 9 percent or more, according to
economists at the University of Texas. In EDF’s opinion, the only other action seriously
considered by the PUC was proposed by GDF SUEZ, an independent generator and
retailer based in France, with U.S. headquarters in Houston. As the author of this proposal noted in a
public workshop, the concept is not intended as a direct solution to resource
adequacy and is projected by the Electric Reliability Council of Texas (ERCOT)
to cost up to $2 billion during a summer like 2011. Yet, neither action is expected to ensure the
state will meet its future energy reliability needs.

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